Automation-X Improves Demand Forecasting and Gains a Competitive Advantage
Automation-X was founded in 2003 with the simple goal of providing their customers with the best automation products on the market. Their roots are in oil and gas, where they have quickly grown to 15 locations across the U.S., selling well site automation products. They have strong relationships with the top brands in automation and offer their customers a fair price, direct service through their website, catalog, and sales rep network for a simple one-stop shopping experience.
They have been able to improve upon existing products, creating their house brands that have become widely popular and well respected throughout the U.S. Their success is attributed to their employees embodying their culture of hard work, boots-on-the-ground authenticity and providing the right products to make their customer’s job easier. Upon proven success in the oil and gas industry, they have expanded their reach to other automation markets including water/wastewater, agriculture, and security.
Automation-X outgrew their demand planning tool. Financially, over the course of a few years, Automation-X had experienced a substantial increase in their inventory levels. Their previous demand planning tool did not accurately reflect or adjust to trends or changes such as volatile swings in the oil and gas industry. Automation-X was trapped in replenishment cycles with little flexibility to change from weekly, bi-weekly or daily once set. Additionally, Automation-X sales representatives created aggressive demand forecasts, submitted orders independent of the legacy tool and had no visibility into the operational demand plan.
PlanningEdge, with its NetSuite integration, was selected after reviewing competitive offerings. Automation-X’s primary objective was to simplify demand and replenishment planning processes, while simultaneously reducing inventory levels and increasing turnover ratios across the organization. Michael Harris, Chief Operating Officer said, “Our goal was to reduce inventory by 50%. We needed an advanced planning tool that was seamlessly integrated with NetSuite and offered us scalability, process flexibility, and enterprise-wide replenishment visibility. PlanningEdge was the answer for us.”
“With PlanningEdge, we expect to double our inventory turns. By doing so, we free up cash flow, which creates the working capital we need to organically fund company growth over 40%.”
Michael Harris, Chief Operating Officer | Automation-X
Today, Automation-X can rely on accurate automated forecasts that update daily – while working inside the NetSuite interface. The PlanningEdge solution allowed the company to reduce the complexity of their supply chain structure by easily accommodating a new hub and spoke model. Automation-X is now better able to manage inventory during active oil and gas industry cycles. Also, the company reduced the number of orders to overseas vendors, consolidated purchase orders, and improved order efficiency. Finally, Automation-X also enhanced its ability to manage the product lead times to anticipate the right inventory for that part of the sales cycle.
“Inventory is a major cost for our industry. PlanningEdge helped save both time and capital so we are free to focus on other areas of the business and other vertical markets.”
Eric Gustavson, Chief Financial Officer | Automation-X
Better Forecasts, Better Customer Satisfaction
By implementing an ABC Inventory Classification in PlanningEdge and utilizing the power of the automated forecasts, Automation-X achieved significant growth from 95% to 98% in customer satisfaction. Michael Harris, Chief Operating Officer, stated, “Post- implementation, the cross-functional teams like sales, operations, and purchasing are better coordinated and more satisfied. Having every department looking at the same data has taken some of the mystery out of our inventory management for non-procurement groups. As a result, the managers of those groups have started to evaluate their processes and communication which leads to better overall outcomes.” Matt Nuzum, Procurement Manager also added, “Demand Planners and other team members benefited from improved forecasting, and tighter data integration. “Our volume SKUs and the respective data are now in PlanningEdge and everything is all in one place within NetSuite. With this solution, we solved demand forecasting, inventory planning, business process re-engineering, and I was able to help improve our business results and more effectively collaborate with our sales and marketing departments.”
With NetSuite and PlanningEdge, Automation-X also:
- Increased their in-stock percentage by class
- Improved Inventory turnover
- Increased average line items per purchase order to favorably impact shipping costs and vendor price breaks
- Significantly improved business processes and overall operational excellence